The California Macintosh and iPhone maker is in the process of ramping up its proprietary financial services technology and increasing Apple’s lending to iPhone users of Apple Pay.
That’s according to a Bloomberg report from earlier this week.
The Cupertino tech giant appears serious about the project, dubbing the effort “Breakout” and seeking to replace its fintech partners with in-house solutions and infrastructure to bolster payment processing, credit checks and emails. other financial services.
Apple CEO Tim Cook Eyes Apple Pay Growth
That could scoop up a tidy sum of future profits from payments alone, as well as greater user enrollment into Apple’s “walled garden” of native apps and products. According to The Verge, there are over 1 billion active users of Apple iPhones worldwide.
Apple Pay’s current fintech service providers CoreCard (CCRD.N) and Green Dot (GDOT.N), which support the company’s peer-to-peer credit and funds transfer products, saw their shares dropping sharply after the news broke on Wednesday, down 12% and 5% respectively.
The move by the Tim Cook-led computer and software maker is a classic Steve Jobs and returns Apple Pay to its traditional ethos of strict in-house command and control over all aspects of its product offerings.
Although Apple Pay is a conventional digital wallet modeled on PayPal, using the company’s massive cash reserves in USD and USD equivalent liquid securities to provide liquidity and support a proprietary database of payments maintained by company’s internal servers, it may still take some time. bite into peer-to-peer payments markets that are powered by cryptocurrency blockchains like Bitcoin (BTC).
According to a 2021 McKinsey Global Payments Report, revenues from the payments industry globally topped $1.9 trillion in 2020. Writing for Reuters Thursday, Liam Proud averred: “Digital upstarts like Affirm (AFRM.O) and Jack Dorsey’s Block (SQ.N) should be on high alert. Lenders like Goldman Sachs (GS.N), however, have less to fear.”
Competition Could Accelerate Blockchain Wallet Development
Since buying Square Payments and turning it into CashApp (and recently renaming it Block), the Dorsey-based fintech company has navigated the payments space and accelerated crypto disruption with its adoption of blockchain. Bitcoin for users to send payments and save their money in bitcoin. Despite skyrocketing growth in recent years, the company’s earnings in Q4 2021 were up around 47% for the quarter.
Nevertheless, Apple’s Breakout project to boost Apple Pay usage on its one billion devices is a direct competitor with the other digital wallets, including the blockchain-based crypto wallets and others like CashApp that offer seamless cryptocurrency integrations powered by networks like Bitcoin.
Will this slow blockchain adoption?
It could – here or there, especially among consumers who already use iPhone and Apple Pay and have yet to embrace cryptocurrency.
But it could also spur faster development of the technical requirements, business partnerships, and commercial marketing that would hasten market adoption of the blockchain for payments and lending.
